People often think that applying for a reverse mortgage is complicated, but it’s really a simple and straightforward process.  Here are the five steps you’ll need to follow to take advantage of this financial program for seniors:

Becoming informed:
Learning about reverse mortgage options until one is comfortably ready to take advantage of such a loan can take time for some, or merely days for others.  There are websites, articles, books, and financial professionals that will help build your knowledge.  HUD and AARP have excellent websites and publish useful booklets.  Friends and family often hold diverse opinions you may wish to consider. 

Counseling is required:
A HUD-approved counselor will help you to understand the program and will inform you of any other financial options .  Usually this is a no-cost, single session either in person or by phone.  At the session’s completion, you will be given a counseling certificate, good for six months, to demonstrate you have completed this requirement. 

Applying is easy: 
 To qualify, everyone on the title needs to be at least age 62, and there must be enough equity to pay off any existing liens or mortgage.  There are no income or credit qualifications. A reverse mortgage specialist will help you complete the loan application, either before or after your counseling session.  However, your loan will not move to the next step until you give a copy of your counseling certificate to the reverse mortgage professional, acknowledging you are ready to proceed with the loan.

Preparing the package: 
 Next the processing and underwriting of your loan begins.  A processor works on collecting a case number as well as a credit report to search for existing liens and judgments.  They then request an appraisal and title work.  If there are repairs needed in the appraiser’s judgment, bids need to be gathered.  Finally, the processor has the job of compiling your information and sending it on the underwriting department.  It’s their task is to evaluate your loan and grant approval, or specify any conditions which yet need to be met. 

Closing the deal:
 Your reverse mortgage specialist will schedule a closing at your convenience with a representative of the title company.  Some closers are particularly flexible and willing to hold the closing in your home.  If any repairs are required, some funds will be withheld to cover the improvements. You are given a complete set of the documents you have signed. After three business days your requested funds are released.  You may draw down any funds in your line of credit or change to a monthly check whenever you choose. You will receive monthly reports from your lender so you are always informed of your loan status in the years ahead.